Mortgage Application Rejected!!

Jfaith97

Wondering if anyone has a similar story and could help. 

Myself and my partner are first time buyers and have a Help to Buy ISA. This ISA had a limit of £200 a month, you are not allowed to put any more a month into this ISA. 

We sent off a mortgage application with Nationwide. We have more than we need for a deposit and earn more than another to cover the cost of the mortgage. 

However, the underwriter at Nationwide have came back and rejected this application due to us “not saving enough”. 

We are limited to how much we put into our ISA and are still continuing to put into it the maximum we’re allowed to even with reaching our deposit amount. 

Seems a bit of a harsh reason to decline. Wondering if anyone else has had a similar issue. 

Thanks 

K_S

@jfaith97 Did they ask for proof of deposit and were you able to evidence the deposit amount required?

If yes, then the reason stated in your post doesn't sound right. It might be worth speaking to your broker or Nationwide (if direct) to get some more detail on the reason for decline.

canaldumidi

Do they mean "“not saving enough” in your ISA, or “not saving enough” overall? Have they had full sight of all your savings?

What has your mortgage broker had to say?

Jfaith97

K_S said:

@jfaith97 Did they ask for proof of deposit and were you able to evidence the deposit amount required?

If yes, then the reason stated in your post doesn't sound right. It might be worth speaking to your broker or Nationwide (if direct) to get some more detail on the reason for decline.

Yes they’ve had all proof sent across to them. 

Our mortgage advisor has just said it will be too long winded to go back and appeal it so we will have to just submit a new application but it’s another hit on the credit score for a hard search. 

Jfaith97

canaldumidi said:

Do they mean "“not saving enough” in your ISA, or “not saving enough” overall? Have they had full sight of all your savings?

What has your mortgage broker had to say?

Mortgage advisor has said it’s a bit of a silly reason considering they’ve had all of our proof and documents, she has said we will just submit a new application with another lender. 

TripleH

Try not to worry, we had 4 mortgage applications submitted in 9 months (2 in 4 weeks) without detriment, especially as a reason for rejection was a falling down house that was actually stone blocks that had a 'textured effect'.

I suspect lenders, where there is a mortgage involved will be more understanding of multiple applications showing if that is the only reason for hard searches.

GDB2222

Jfaith97 said:

Wondering if anyone has a similar story and could help. 

Myself and my partner are first time buyers and have a Help to Buy ISA. This ISA had a limit of £200 a month, you are not allowed to put any more a month into this ISA. 

We sent off a mortgage application with Nationwide. We have more than we need for a deposit and earn more than another to cover the cost of the mortgage. 

However, the underwriter at Nationwide have came back and rejected this application due to us “not saving enough”. 

We are limited to how much we put into our ISA and are still continuing to put into it the maximum we’re allowed to even with reaching our deposit amount. 

Seems a bit of a harsh reason to decline. Wondering if anyone else has had a similar issue. 

Thanks 

What other saving do you usually put aside each month  apart from the ISA? You may be up to the limit on the ISA, but there are other savings options.  Are they looking for more going into those?

K_S

Jfaith97 said:

K_S said:

@jfaith97 Did they ask for proof of deposit and were you able to evidence the deposit amount required?

If yes, then the reason stated in your post doesn't sound right. It might be worth speaking to your broker or Nationwide (if direct) to get some more detail on the reason for decline.

Yes they’ve had all proof sent across to them. 

Our mortgage advisor has just said it will be too long winded to go back and appeal it so we will have to just submit a new application but it’s another hit on the credit score for a hard search. 

@jfaith97 It's good that you're using a broker, it looks like they have understood the underlying reason for the decline and are confident that it won't carry over to a different lender.

I wouldn't worry too much about the hard-footprint credit check from the Nationwide app, I regularly get clients who come to me after getting declined and it's never stopped them from getting a mortgage that they would otherwise be eligible for.

Good luck and hope you get a mortgage offer soon!

TBagpuss

What other savings were you making?

It sounds as though the issue might be related to the 'stress testing' they do to see if you are likely to be able to afford the mortgage payments if interest rate/ costs of living rise - if your current housing costs are similar to or lower than the likely mortgage repayments maybe £200 a month isn't seen as a big enough safety margin? 

tooldle

I'd interpret this as Nationwide looking for savings outside of your ISA. If the deposit is the only savings you have, Nationwide might e seeing an affordability issue. Is your application in advance of offering on a property?

SpeakingFranglais

This happened to our daughter, she’d saved most of her deposit with Skipton in a LISA but the rest with NW. She applied to NW with all proof of savings through the broker and they knocked her back. Even though the whole family at the same address we were life long NW customers with a fully paid off mortgage and her brother was accepted the previous year.

no idea why, she went to Skipton who welcomed her with open arms and beat NWs rate.